Post on 16-Jan-2016
LEGAL DECISIONS P&C INSURERS OUGHT TO KNOW
CHRISTOPHER R. DUNN
DUTTON BROCK LLP
March 9, 2011
GOAL OF PERSONAL INURY DAMAGES ASSESSMENT
Lord Blackburn in Livingstone v. Rawyards Coal Co. (1880), 5 App. Cas. 25 at 39 (H.L.):
… you should as nearly as possible get at that sum of money which will put the party who has been injured, or who has suffered, in the same position as he would have been in if he had not sustained the wrong for which he is now getting his compensation or reparation.
BASICS OF PERSONAL INJURY DAMAGES ASSESSMENT
General Damages Special Damages Loss of Income/Pension Income Future Cost of Care/Attendant Care/Housing
Cost Loss of Housekeeping/Handyman Services Guardianship Costs Family Law Act Claims
Additional Considerations
Management FeesGross-upContingenciesMultiplier/Discount Rate
WHO IS RESPONSIBLE?
General Damages
1978
Supreme Court of Canada Trilogy (1978)
Andrews v. Grand and ToyTeno v. Arnold Thornton v. Prince George School District
$100,000
$332,310
Special Damages
Future Loss of Income/Pension Income
Future Cost of
Care/Attendant
Care/Rehabilitation/
Housing Cost
Loss of Housekeeping/Handyman Services
Guardianship Costs
Family LawAct Claims
Management Fees
Gross Up
ContingenciesPositive
OvertimeFringe Benefits
NegativeUnemploymentMortalityAccidentsDepression/Recession
Discount Rate/Multiplier Lewis v. Todd (1980, Supreme Court of Canada)
The discount rate represents the difference between the interest rate earned on investment income and the rate of inflation
Established by Rule 59.03(1) of the Ontario Rules of Civil Procedure
Discount rate was historically fixed at 2.5% For trials in 2010 discount rate is 1.25% For trials in 2011 discount rate is .5%
Examples of Difference inDiscount Rate
Assume 25 year old plaintiff is awarded $50,000 per year for loss of income for 40 years
Discount Rate
Total Awarded Amount Payable Now
3% $2,000,000 $1,171,545
2% $2,000,000 $1,380,265
1% $2,000,000 $1,649,245
Hohol v. Pickering, (1985 Alta C.A.)
39 year old male Crush fracture of T12 – permanent paraplegia Employed as a mechanic Award - $518,648.33
General damages - $110,000 Special damages - $42,025.03 Past loss of earnings - $97,873.30 Cost of future care - $67,250 Future loss of income - $201,500
Pickering v. Deacon(1984 B.C.C.A.)
25 year old male Severe brain injury Employed as a farming contractor Award - $730,794
General damages - $150,000 Loss of Earning Capacity - $282,360 Past loss of earnings - $237,500 Cost of future care - $425,532 Management Fees - $64,000 Special Damages - $15,000
Watkins v. Olafson(1989 S.C.R.)
33 year old male Fracture of C6 – complete quadriplegia Award - $2,075,632
General damages - $180,000 Loss of Future Earnings - $540,000 Past loss of earnings - $263,000 Cost of future care - $1,046,078 Management Fees - $75,000 Special Damages - $19,308
Jacobsen v. Nike (1996 B.C.S.C.)
19 year old maleIncomplete QuadriplegicAward - $2,551,435
General damages - $251,963 Loss of Future Earnings - $1,000,000 Cost of Future Care - $1,299,472
Chow v. Hiscock (2005 B.C.S.C.)
19 year old maleSevere brain injuryAward - $5,679,431
General damages - $306,500 Loss of Past and Future Earnings - $1,189,500 Cost of Future Care - $4,126,407 Awarded to Mother for Attendant Care -
$73,544
Gordon v. Grieg (2007 Ont. S.C.J.)
Severe brain and spinal injuriesAward - $11,369,525
General damages - $310,000 Loss of past income - $15,100 Loss of future income - $1,871,600 Future care costs - $8,646,900 Management fee - $525,925 FLA claim - $150,000
Morrison v. Grieg (2007 Ont. S.C.J.)
Spinal injuries resulting in paraplegia Award - $12,441,197
General damages - $310,000 Loss of past income - $55,400 Loss of future earnings - $2,298,320 Future care costs - $8,880,000 Housing costs - $374,800 Management fee - $447,164 Special damages $ 74,713.78 FLA claim - $165,000
Sandhu v. Wellington Place Apartments (2008 Ont. S.C.J.)
2 year old maleBrain injury – would function at 12 year
old level for remainder of his lifeAward - $14,731,945
General damages - $311,000 Future loss of earnings - $1,166,283 Future care costs - $10,942,908 Guardianship costs - $1,795,800 FLA claims - $300,000
Sandhu v. Wellington Place Apartments (2008 Ont. S.C.J.)
Summary of Guardianship award$268,800 – non-corporate guardian$400,000 legal expenses$1,127,000 corporate guardian
Marcoccia (Litigation Guardian of) v. Gill (2009 Ont. C.A.) – Jury Award
20 year old maleSevere brain injuryAward - $16,914,798
General damages - $312,000 Loss of future earnings - $1,384,918 Future care costs - $13,952,064 Individual guardian fees - $161,250 Future legal fees - $389,009 Future corporate co-guardian fees -$715,557
MacNeil v. Bryan(2009 Ont. S.C.J.)
15 year old femaleSevere brain injuryAward - $18,427,207.20
General damages - $321,968 Loss of past income - $18,730.33 Loss of future earnings - $1,374,800 Loss of future interdependent relationship - $190,300 Future care costs - $15,158,500 Management fee - $836,180 FLA Claims - $312,500
PROGRESSION OF DAMAGE AWARDS
(1978-2009)
$500,000
$1,500,000
$2,500,000
$3,500,000
$4,500,000
$5,500,000
$6,500,000
$7,500,000
$8,500,000
$9,500,000
$10,500,000
$11,500,000
$12,500,000
$13,500,000
$14,500,000
$15,500,000
$16,500,000
$17,500,000
$18,500,000
$19,500,000
1978 1978 1978 1982 1984 1984 1987 1989 1992 1993 1993 1995 1996 1996 1997 2000 2003 2003 2003 2004 2005 2006 2007 2007 2008 2009 2009
Year
Awards
IMPACT ON INSURERSAND BROKERS
Appropriate limits of coverage – where is the money coming from?Broker’s duty of care re: appropriate
limitsIncreased premiums
Reinsurance issuesCatastrophic coverage layersReporting issues
IMPACT ON INSURERSAND BROKERS
Excess of loss coverageAvailabilityReporting issues
Bad Faith
Questions?
Thank you!